Proposal Addresses Municipal Inequities

Service Nova Scotia and Municipal Relations (to March 31, 2014)

February 27, 2001 5:23 PM

Municipal leaders are looking at a proposal that would see a
major shift in the way services are provided and funds
distributed throughout Nova Scotia.

The proposal is the result of the Roles and Responsibilities
Review process and is now being presented to all 55
municipalities for review.

"This proposal takes aim at very basic inequities in this
province," said Angus MacIsaac, Minister of Service Nova Scotia
and Municipal Relations. "Some areas of the province are booming
while others are struggling just to provide basic services. One
of the things I like about this proposal is that it is based on
the principles of fairness and equity to all regions. All Nova
Scotians should benefit from the new wealth in our province."

The core of the proposal would have the provincial government
take on $21.9 million of costs associated with public housing,
corrections services and increases in its grants in lieu of
property taxes for university residences.

In exchange, municipalities would take over funding the $22.2
million municipal equalization program. At the same time, the
equalization formula would be modified for more equitable
distribution among municipalities. The province would also create
and fund a $2.3 million foundation grant to help towns with
upkeep of roads.

"The proposed changes would benefit the majority of
municipalities and translate into either an increase in their
level of services or a decrease in taxes," said Mr. MacIsaac.
"The decision to go forward will be based on the input of all 55
municipal units."

All municipalities will have a month-long consultation period to
review the proposal and provide input to the Roles and
Responsibilities Steering Committee.

The Roles and Responsibilities Review was started in 1998 and its
mandate is to conduct a comprehensive review of municipal and
provincial service responsibilities, delivery, and funding. The
deadline for a recommendation from the steering committee is
April 2001.


For Broadcast Use:

     Municipal leaders are looking at a proposal that would see a

major shift in the way services are provided and funds

distributed throughout Nova Scotia.

     The proposal, which was distributed to 55 municipalities,

is the result of the Roles and Responsibilities Review process.

     Angus MacIsaac, Minister of Service Nova Scotia and

Municipal Relations, says the proposed changes would result in

most municipalities seeing either an increase in their level of

services or a decrease in taxes.

     All municipalities have one month to review and provide

input on the proposal.

     The Roles and Responsibilities Review''s mandate is to

review municipal and provincial service responsibilities,

delivery, and funding.


- 30-

Contact: Condea Krewenki
         Service Nova Scotia and Municipal Relations
         902-424-5378
         E-mail: krewenck@gov.ns.ca


Fact Sheet

Background

-- Provincial-Municipal Roles and Responsibilities Review was
started jointly between the province and Union of Nova Scotia
Municipalities (UNSM) in 1998.

-- Mandate was to conduct a comprehensive review of municipal and
provincial service responsibilities, delivery, and funding.


Social Services and Assessment

-- Provincial government assumed social services costs from
municipalities in 1998 at an expense of $44 million, to be
phased-in over five years.

-- Half of the municipal social services savings ($22 million), is
going to Halifax Regional Municipality (HRM).

-- There remains $17.6 million to be picked up by the province
from all municipalities between 2001 and 2003, with $8.8 million of
these savings to go to HRM.


The Proposed Solution

-- The proposal is a result of the joint Roles and
Responsibilities Review between the province and UNSM.

-- Government of Nova Scotia is assuming the municipal
contributions to public housing ($6 million per year) and
corrections ($14.6 million per year), as well as paying the full
grant in lieu payments to municipalities for university residences
($1.3 million).

-- Equalization grant ($22.2 million) will be funded and self-
directed by municipalities.

-- Provincial government has created a foundation grant of $2.3
million to assist towns with the upkeep of roads.


Other Factors

-- When only the final two years (2001-03) of the social services
"upload" and the assessment "download" is factored in, the net cost
to Province of Nova Scotia will be $5 million.

-- If the business occupancy tax is eliminated (a separate process
currently out for consultation), the federal money this is expected
to leverage into municipalities will almost completely offset any
of the costs from the proposed exchange.

-- HRM will have the biggest costs to absorb. This will be offset
by corrections, housing, and grant in lieu costs to be picked up by
the province. When social services costs and assessment costs are
factored in, this amount is $2.9 million.

-- If the Business Occupancy tax is eliminated, the federal
government is expected to increase federal grants in lieu payments
to HRM, estimated at $3.9 million, making HRM a net winner by $1
million annually.

-- $2.9 million impact on HRM is less than 1 per cent of HRM''s
annual budget.

-- Cape Breton Regional Municipality will gain $4.1 million under
this proposal.

-- Positive financial impact on 46 municipalities, out of 55 in
the province.

-- Proposal significantly assists those communities in greatest
need without being punitive to the wealthy communities or the
province.


Looking Forward

-- If remained at status quo, the results would be devastating to
some parts of the province. For example, CBRM is facing a financial
crisis without assistance and a number of smaller communities may
not survive in the long run.

-- First time in Canada that a municipal equalization will be
based on property taxes, rather than income taxes.

-- Proposed solution combines resources from all three levels of
government.

-- Consultation period of February 28 - March 23, 2001.

-- Twelve-month notice due in April 2001.



nwc                      February 27, 2001 5:17 p.m.